Fiscal Policy and Optimal Taxation: Evidence from a Tax Smoothing Exercise

15 Pages Posted: 9 Mar 2010

Date Written: 2009-05-22

Abstract

Testing the tax smoothing hypothesis for the EU-15, we hypothesise that the introduction of the 3%-deficit rule of the Maastricht Treaty in 1993 may have inhibited tax smoothing as European Union (EU)-member states are no longer capable of letting the deficit grow as much as implied by expected decreases in government expenditure. Our results show that for some countries this fiscal rule may have indeed changed the validity of the tax smoothing hypothesis, thus implying that EU accession has caused welfare losses.

Suggested Citation

Reitschuler, Gerhard, Fiscal Policy and Optimal Taxation: Evidence from a Tax Smoothing Exercise (2009-05-22). Scottish Journal of Political Economy, Vol. 57, Issue 2, pp. 238-252, May 2010, Available at SSRN: https://ssrn.com/abstract=1567215 or http://dx.doi.org/10.1111/j.1467-9485.2010.00515.x

Gerhard Reitschuler (Contact Author)

University of Innsbruck ( email )

Universit├Ątsstra├če 15
Innsbruck, Innsbruck 6020
Austria

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
2
Abstract Views
287
PlumX Metrics